#USA #New York #Global IPO #Emerging Markets #AI Companies

Overview of the 2024 IPO Market

The global IPO market experienced a decline in 2024, recording a total of 1,215 deals with proceeds amounting to US$121.2 billion. This marks a slight drop compared to the performance in 2023. Notably, the second half of the year saw stronger activity, particularly in the fourth quarter, which outperformed the previous three quarters.

Regional Highlights

EMEIA and Americas

The EMEIA region emerged as the leader for both deals and proceeds in 2024, with 522 IPOs raising US$53.2 billion. This region contributed to six out of the ten largest public offerings, including three that were backed by private equity and venture capital. Meanwhile, the Americas observed a significant revival, establishing its highest level of IPO activity since 2021 with 205 listings that generated US$33.1 billion in proceeds. This recovery affirms the United States’ status as the most attractive market for global investors, especially with a record 55% of 2024 public listings being from foreign issuers.

Asia-Pacific

Contrasting with these gains, the Asia-Pacific region faced a 35% drop in deals and a staggering 51% decline in proceeds year-over-year. The Chinese mainland, in particular, recorded the lowest IPO activity in a decade due to tightened regulations, while Australia suffered its most significant volume decline in over 20 years. However, Malaysia reached a notable milestone with a 19-year high in IPO numbers, driven by favorable valuation and liquidity factors.

The Rise of Technology and AI Companies

A significant trend in 2024 is the dominance of the technology, media, and telecommunications (TMT), industrials, and consumer sectors in the IPO market, collectively accounting for approximately 60% of both the volume and proceeds from listings. Furthermore, IPOs from private equity (PE) and venture capital (VC) backed companies were pivotal, contributing to nearly half of the global IPO proceeds. This is especially evident with a remarkable increase in mega IPOs, where 12 out of the 20 were PE-backed, compared to only two in 2023.

The ongoing allure of artificial intelligence (AI) companies remains a strong driving force, with over 600 public AI firms currently operating and nearly half having gone public in the last four years. As interest in AI continues, approximately 60 companies are presently in the IPO registration process, with significant expectations for future listings.

Effects of Regulatory Changes

The approval of Bitcoin and Ethereum exchange-traded funds (ETFs) in the U.S. has further bolstered the legitimacy of digital assets, allowing greater institutional engagement and potentially igniting a surge in IPO filings from crypto-centered firms. Still, successful navigation of regulatory landscapes and compliance measures will be critical for these firms.

Looking Ahead to 2025

The consequences of the U.S. elections are often felt in IPO activity, with historical data showing an increase in listings in the aftermath. With a post-election climate usually fostering stability in market sentiment, sectors such as industrials, TMT, and financials are expected to lead in this renewed activity. Economic factors—including shifting fiscal policies, global supply chains, and ESG criteria—will significantly influence future IPO trends.

George Chan, the EY Global IPO Leader, notes, “Business transformation requires funding, and an IPO offers a powerful avenue to raise the capital needed. With a strong pipeline for 2025, the landscape appears optimistic for companies aiming to seize the opportunities emerging in this evolving market.”

In summary, while 2024 has posed various challenges, the global IPO market is increasingly resilient, indicating a promising outlook as it moves into 2025. The interplay of regional growth, sector strengths, and overall economic dynamics will be central to shaping the future of IPO activities globally.